Stocks, Bonds Fall on Doubts Over Treasury’s Plan: Markets Wrap
(Bloomberg) — A rally in bonds fizzled out and stocks fell on bets the Treasury’s plan to curb borrowing costs is just a short-term fix, with higher oil prices stoking worries about inflation.
Thirty-year yields rose even as Treasury Secretary Scott Bessent flagged a bigger buyback potential and an upcoming new fiscal plan. The S&P 500 extended this week’s drop, with Walmart Inc. sinking on disappointing sales. Brent hovered near $94 as President Donald Trump’s threat to crush the Iranian economy clouded peace prospects. Bitcoin topped $72,000.
The Treasury chief played down Thursday’s market moves, saying “anything that happens within a 24-hour period is noise.” And he highlighted that the expanded buyback operations “could be more than the $4 billion” size currently planned to start next month.
“We are announcing probably at the end of this week, beginning of next week, an increased focus on fiscal consolidation,” Bessent told CNBC.
The latest action on Wall Street follows a series of Treasury decisions that have signaled growing concern about rising long-term yields. Lofty government financing costs are feeding through to the broader economy, after years of elevated inflation and government spending.
At JPMorgan Chase & Co., Jay Barry says the latest Treasury maneuver only addressed the symptoms and not the root cause: the US runs a 6% deficit in an economy near full employment.
“Absent real fiscal consolidation, we fear the markets will view this action as lacking credibility,” he noted.
The Treasury’s intervention is evidence policymakers are focused on maintaining stability at the long end of the curve and are uncomfortable with the pace of the rise in yields, noted Ulrike Hoffmann-Burchardi at UBS Chief Investment Office. But it does not fundamentally alter the outlook for rates, she said.
“Our base case remains that the Fed is unlikely to raise rates this year if inflation continues to moderate, although policymakers have retained the option to tighten should price pressures prove more persistent than expected,” Hoffmann-Burchardi added.
Federal Reserve Bank of San Francisco President Mary Daly suggested the Treasury market is signaling that monetary policy is in a good place right now.
On the geopolitical front, Bessent said the US will soon unveil its plan to economically isolate Iran and its trading partners, after Trump threatened Tehran and others with “an ECONOMIC D-DAY” to end the current stalemate in the Middle East.
Bessent, in a CNBC interview, said he would hold a press conference on Monday to “talk about exactly what we’re going to do” and sought to ratchet up pressure on US allies to join the effort.
Corporate Highlights:
Boeing Co. is making “steady progress” replacing cracked metal structures inside its two Air Force One presidential transport jets, a major retrofit that must be finished before targeted delivery in mid-2028, the US Air Force said. Super Micro Computer Inc. completed an independent probe into the alleged smuggling of Nvidia Corp. chips into China, with the investigation team concluding the company’s current senior management had no knowledge of the purported scheme. Deere & Co. jumped after the tractor maker said it’s seeing a boost in orders for its machinery, raising hopes that the agriculture sector is poised for recovery. Coty Inc. reported a drop in comparable sales and forecast a “transition” period in the current fiscal year as the beauty conglomerate works to turn around its business. Alibaba Group Holding Ltd.’s profit plunged more than 75% after the Chinese company ratcheted up quarterly capital spending to almost $10 billion, aiming to safeguard its position in a fiercely competitive global AI arena. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.4% as of 12:20 p.m. New York time The Nasdaq 100 fell 0.7% The Dow Jones Industrial Average fell 0.9% The MSCI World Index fell 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1675 The British pound rose 0.2% to $1.3632 The Japanese yen fell 0.5% to 158.97 per dollar Cryptocurrencies
Bitcoin rose 4.7% to $72,260.57 Ether rose 4.6% to $2,319.25 Bonds
The yield on 10-year Treasuries advanced five basis points to 4.70% Germany’s 10-year yield was little changed at 3.26% Britain’s 10-year yield advanced two basis points to 5.07% The yield on 30-year Treasuries advanced five basis points to 5.24% Commodities
West Texas Intermediate crude rose 2.5% to $87.94 a barrel Spot gold fell 0.1% to $4,510.19 an ounce ©2026 Bloomberg L.P.
